Online photo sharing and printing service Shutterfly raised $87 million in an IPO today, closing up 3.7% at $15.55 per share. VentureBeat points out that the price climbed as high as $16.73 at one point in the day.
Born in 1999, Shutterfly is a survivor of the last bubble and crash. Now it’s an interesting case for considering other possible valuations. It also gives us a chance to look at what a company with a successful IPO took to market. For comparison, Flickr is rumored to have been acquired by Yahoo! for $30 to $35 million.
After J.P. Morgan, Piper Jaffray and Jefferies sold 5.8 million of Shutterfly’s 23.6 million shares, the company ended the day with a market value of more than $350 million. With about 200 employees it had just under a 34% net profit margin on about $84 million in revenue last year. The company has taken $67 million in VC backing to date. NetScape co-founder Jim Clark, and Shutterfly board chair, bought about 30% of the stock sold today.
In a time when IPOs are among the least common liquidity events enjoyed by Web 2.0 startups, for a photosharing site to remain independent and go public is interesting relative to all the startups we profile here.
Shutterfly is a company that has lots of overhead, faces price cuts from competitors and has no shortage of small startups seeking to edge into its market. It makes much of its revenue from shipping and faces questions around scalability. There’s some interesting analysis over at MrWaveTheory.
While Shutterfly offers more than 150 print and DVD products, photo to print startups like OneTrueMedia, Tabblo and Scrapblog offer more sophisticated design capabilities, more viral online distribution and in some cases prominent media partners. Most photo sharing sites online now allow users to print or burn to DVD their archives, though few of them base their entire business model on printing as Shutterfly does.
What does Shutterfly offer in user experience? A product that clearly appeals to mainstream users.
Its primary competitor, HP’s SnapFish, offers much of the same feature set plus mobile upload by email.
I find everything but site navigation pleasing in Shutterfly. My one complaint as a user is that it doesn’t offer tagging. Album navigation means that one photo can’t be found in more than one group. There’s a reason tagging has caught on recently – it’s really useful and makes an group of pages much easier to move around in.
Will the company succeed now that it’s gone public? It’s hard to say, given even its own concerns about overhead, price competition and an increasingly diversified market. You can’t say that Shutterfly is standing still, though. This new infusion of cash, the contemporary features that it does offer and its already large user base certainly look good.